Investments are generally listed in accordance to one of three primary traits. They are Income, growth of capital and safety. The three traits are in cohesion to the goals of the investor. With investment opportunities readily improving, people are more drawn towards them. Although many investors want to excel in all three aspects of investments, they sometimes fail to realize that one may come at the cost of the other. Upon closer inspection of income, growth and safety; one may be able to form a strategy that thrashes its rivals.

Element Of Risk:

Talking about income first, in order to reap higher profits one has to increase the element of risk. An investment with a higher internal rate of return (IRR) is likely to have greater risk and hence lower chances of a safe business venture. There is truth in the notion that safety and income do not coexist most of the time. If one wants increments in the rate of investment. Corporate bonds are the ones with the lowest investment ratings.

Corporate bonds or preferred stock/shares with higher ratings in dividends are more prone to default compared to others. A bond with a medium yield rating also has medium chances of being void. Investors do purchase stocks so that they could reap some profit.

While there are people who tend to take greater risks than others. Some people who require a fixed amount of income generation per month are likely to purchase a bond with a higher chance of safety. When it comes to safety, there is no investment that is completely safe. One may deem all investments as having a slight chance of failure. To acquire a certain level of “safety” in one’s investment one can only invest in firms that are doing exceptionally well.

Secure Investment:

As money loses value with time, for many the sole purpose of purchasing a find like this is to preserve his original investment. Treasury bills; certificates of deposit may serve this purpose very well. Corporate bonds have the highest yields.As discussed earlier, a corporate bond gives a more yield than a treasury bill but the risk involved is much higher and vice versa. The point to be noted is that there is a different amount of risk involved in each type of bond and one must choose wisely and according to his requirement. Be it, a junk bond or a government bond. The most important aspect is one’s own interest.

Capital Gain:

The growth of capital is also a primary investment objective of many investors. A gain in capital results from an increase in the value of an asset. Investors only recognize capital gain as income when the asset is sold for a price higher than the price it was originally acquired for. While some investors also go into the capital loss, most investors who prioritize growth as their prime objective did so because they do not need a constant income and are looking at a much bigger picture.

Common stock is the top choice of such investors as it is not cumulative, and it also rises in price more than preferred stock. However, stocks of well reputed companies in the stock exchange are somewhat good all round in terms of growth, safety and yield. Common stock is considered as a risky proposition as compared to others but also is better in the way that it is liable to less taxation. Governments generally charge fewer taxes on common stock as it is making small companies grow.

Other objectives:

Investors also have some secondary objectives. They might be tax evasion or tax minimization. Tax minimization is a part of many investor long term plans of action. Investors want to seek opportunities with low tax prospects. Even firms hold special Corporate Social Responsibility (CSR) programs to help evade tax. There are many ways that investors can avoid taxes. They do that particularly by investing in common stocks. Improving liquidity is also one of the secondary objectives. Many investments take a certain period of time to transform into cash. Common stocks also serve this objective very well. Bonds too can be sold but there are some types of bonds that are not tradable.

Incoming search terms:

• Investment Objective
• objectives of companies dealing
• objective that when doing investment in one company
• the main investment objectives
• What objectives do the investments serve?
• equity capital objectives
• what are one of the main objectives of investing
• stock investment objective
• objectives of doing investment
• capital gain objective